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Why should the market care about hard disk drives?

It has taken roughly 30+ years and some interesting industry consolidation for the remaining hard disk drive (HDD) manufacturers to form a new trade association. According to the Storage Products Association's web site, the new group was formed as a means to "promote the use and understanding of rotating magnetic media hard drive technologies". So, in light of today’s excitement for new storage devices built with NAND flash memory as well as for the scientists working on tomorrow's superior storage technologies at the atomic level, why should the market care about old HDD storage trends and advancements? Because, the market is watchful of the astounding expansion of data, the growth of which is compounding annually by the increasing number of devices connecting to the internet, and service providers will continue to rely on a proven solution with enough production capacity to satisfy projected future demand-high-density HDDs.

As consumer's use of cloud computing grows, a large percentage of data will be stored, processed, and transferred within data centers. Consequently, the storage industry now deals in terms of petabytes (PB) and even exabytes (EB) of data. It's been reported that all the digital data created, replicated, and consumed by 2013 will be just over 5 million PB, or approximately 5thousand EB, doubling every two years to reach 40 thousand EB in 20201. Moreover, if you believe IBM's assessment that 90% of all the data in the world today has been generated over the last two years, one can begin to see how overwhelming the situation is2.

With the terabyte-sized storage capacity points of today's enterprise-class HDDs, unit production in the tens of millions, and a high density cost advantage, HDDs are currently, and will continue to be, a fundamental solution over the latest and greatest storage technology - solid state drives (SSDs). In 2012, the HDD industry shipped 66.3 thousand PB in 63.4 million business-critical and mission-critical HDDs, whereas the NAND industry delivered 1.7 thousand PB in 5.7 million enterprise-grade server and storage SSDs4. Some analysts attach an average annual growth rate of 59% to the unit shipments of enterprise-class SSDs over the next three years5. Comparatively, it should be noted that total SSD market tripled in 2012 to 39 million units shipped and is forecasted to reach 83 million units shipped for 20136. Nonetheless, even an aggressive growth forecast of shipments for enterprise-grade SSDs approximating a delivery of over 8 thousand PB in 11.7 million units for 2014, this is still much less than the market will need or can afford.

Since today's flash memory factories cost $4 to $7 billion to construct7, overcoming the current disproportion between HDD and SSD manufacturing would cost the NAND industry hundreds of billions of dollars to produce enough SSDs to displace a small percentage of the forecasted need for enterprise storage. Considering the reports of capital expenditure budgets actually being trimmed, the NAND flash industry will need to spend far more than the projected $10.4 billion in capex for 20138.

Expect HDDs to continuing storing the majority of world's data for the near future while SSDs and future storage technologies will be used in more calculated and purposeful ways. Furthermore, as seen recently with the creation of solid state hybrid drives, it's not unreasonable to anticipate additional technological challenges, breakthroughs, and new directions in magnetic media storage product architectures to efficiently store data. Stay tuned.

  1. IDC / EMC
    IDC / EMC
  2. IBM
  3. Intel
  4. Gartner
  5. Objective Analysis
  6. IHS iSuppli
  7. Toshiba
  8. IC Insights

The views expressed on this post are my own and do not necessarily reflect the views of TAEC or Toshiba Corporation.

The views and opinions expressed in this blog are those of the author(s) and do not necessarily reflect those of Toshiba America Electronic Components, Inc.

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